The products carry high margins for the banks selling them, but can be mind boggling in their complexity and their uncertainty of outcome.

Bloomberg reporter Zeke Faux describes one:

Morgan Stanley’s CMS Curve securities offer a fixed 10 percent rate for two years. The yield for the next 13 years is five times the difference between long- and short-term constant maturity swap rates, not to exceed 18 percent annually, earned when the Standard & Poor’s 500-stock index doesn’t dip below 875, according to a regulatory filing.

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